New resources for municipalities

THE CORONAVIRUS outbreak put pressure on the resources of both the municipalities as well as the central government. on the one hand, the measures against the outbreak disrupted commercial activities and caused a significant decline in municipalities’ income; on the other, they led to additional resource needs.

Kemal Kilicdaroglu, the President of the Republican People’s Party (CHP) talked about these issue during his announcement of the 16-article package. Kilicdaroglu called for the establishment of a new central-regional balance and enhancement of the municipalities’ income. Mehmet Akif Hamzacebi, the Istanbul Representative of CHP also submitted a package of legislative amendments. In the proposal, Hamzacebi suggested that municipalities, in addition to the amount calculated by subparagraph (d) of Article 68 of the Municipal Code, should be given the opportunity to borrow an 50 percent that amount in 2020.

The offer also called for payment of the shares allocated to the provincial private administrations and municipalities from the general budget tax revenues until December 31 without deductions due to debts and the capital of the provincial bank to be increased to TRY 45 billion, up from TRY 30 billion. According to the proposal, the general budget will fund the TRY 15 billion increase for the provincial bank’s capital and this amount will be collected on behalf of special provincial administrations and municipalities as of January 1, 2021, by deducting from the shares that will be allocated over the sum of the monthly general budget tax revenues.